HSI Ends Week Strongly, Abe Resignation Riles Tokyo

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2020-08-28 HKT 16:47

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  • The market was happy that era of cheap borrowing is here for the foreseeable future. File photo: RTHK

    The market was happy that era of cheap borrowing is here for the foreseeable future. File photo: RTHK

Hong Kong stocks finished Friday on a positive note as traders welcomed a move by the US Federal Reserve that will likely keep interest rates ultra low for the foreseeable future.

The Hang Seng Index added 0.6 percent, to 25,422.

Federal Reserve boss Jerome Powell said policymakers would stick with the new framework "for some time", indicating that the era of cheap borrowing is here for the foreseeable future.

On the mainland, the Shanghai Composite Index rallied 1.6 percent, to 3,403 while the Shenzhen Composite Index surged 2 percent, to 2,305.

Tokyo's Nikkei 225 initially dropped more than 2 percent in response to reports Abe, Japan's longest-serving prime minister, planned to step down over health issues. It ended down 1.4 percent.

The news also sent the yen, a safe haven in times of uncertainty, surging briefly to 105.61 against the US dollar, from 106.74.

The Japanese leader later confirmed his resignation at a press conference, saying he was suffering from a recurrence of the ulcerative colitis that ended his first term in office.

"Abe's economic policy has been seen as market friendly, especially the Bank of Japan's ultra-loose monetary policy in asset purchases, including government bonds, corporate debt and exchange traded funds," said JP Morgan's Yai.

"Not all potential successors of PM Abe are in favor of such aggressive monetary stimulus."

Singapore rose more than 1 percent while Mumbai gained 0.8 percent and Seoul put on 0.4 percent with Jakarta and Bangkok also higher.

Wellington edged up as it reopened after being hit early on by a cyberattack for a fourth straight day.

Officials at the New Zealand Exchange said they were investigating after Thursday's trading was called off soon after opening. (AFP)

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